Release Date: April 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Rajratan Global Wire Ltd (BOM:517522, Financial) reported improved capacity utilization at its Chennai, Pithampur, and Thailand facilities, with Chennai showing significant progress.
- The company is seeing positive results in the export market, which has been a focus for the past two years.
- The US tariffs have not negatively impacted the company; instead, they have provided a competitive advantage over Chinese products.
- Rajratan Global Wire Ltd (BOM:517522) plans to diversify into the wire rope business, which is expected to add value and profitability.
- The company anticipates a 15% volume growth for the next fiscal year, driven by increased exports and better utilization of the Chennai facility.
Negative Points
- The Chennai facility has been operating at a loss, impacting the company's overall financial performance.
- High depreciation and finance costs have been incurred due to investments in the Chennai plant.
- The Indian tire industry is expected to grow only at a modest rate of 5% to 6%, limiting potential growth in that segment.
- There is increased competition in the bead wire market, with new capacities being added by competitors like Tata and Bansal Wire.
- The Thailand subsidiary experienced a muted quarter, with challenges in maintaining margins due to competition and equipment breakdowns.
Q & A Highlights
Q: Could you provide insights into the current outlook of the Indian tire industry?
A: The current outlook remains stable, with expected growth in the tire industry at around 5% to 6%, as per customer feedback. - Sunil Chordia, Chairman and Managing Director
Q: Can you elaborate on the new wire rope initiative, including capacity, cost, and expected ROI?
A: We plan to invest INR50 crore to create a 10,000-ton capacity for wire ropes, expecting INR100 crore in revenue. This initiative leverages existing black wire capacity and aims to add value and profitability. Production is expected to start in about a year. - Sunil Chordia, Chairman and Managing Director
Q: What is the target utilization for the Chennai facility this year?
A: We aim for 20,000 tons of production in Chennai this year, with no projected growth in Pithampur. The focus is on approvals and geographic supply optimization. - Sunil Chordia, Chairman and Managing Director
Q: How will the recent US tariffs impact your business?
A: The US tariffs have not negatively affected us; in fact, they have a positive impact as tariffs on China are higher than those on India for our products. - Sunil Chordia, Chairman and Managing Director
Q: What are the financial expectations for the next fiscal year in terms of revenue and EBITDA?
A: We anticipate a 15% volume growth and a slight improvement in EBITDA percentage due to better utilization of the Chennai facility, which will reduce overall costs. - Sunil Chordia, Chairman and Managing Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
